Housing Hubris: Can Home Prices Spiral upward Forever?
For the Wall Street sequel, the subtitle was Money Never Sleeps. But the Oliver Stone reprisal of Gordon Gecko was the stuff of 2010. In America, a decade plus ago, money slept. Now, it truly doesn’t, with cryptocurrency prices gyrating 24/7/365. This frantic activity has spread to other asset markets.
Once real estate was stable and slow moving. Buyers would walk through a home, and walk it again with someone they trusted, before making an offer. But, as Francesca Mari titles his lengthy New York Times Magazine article, “In Austin and cities round the country, the crazy real estate market has forced regular people to act like speculators.” He wonders, “Will home buying ever be ‘normal’ again?”
Mari’s piece chronicles the trials and tribulations of millennials (who are now the largest generation) simply trying to buy a home. In some cases, the offers are made long distance on the basis of images from their computer screens. Nationwide home prices have soared nearly 25 percent. But, where the jobs are, in medium-size metropolitan areas such as Boise, Phoenix, Austin, and Salt Lake City, prices have soared 46 percent, 36 percent, 35 percent, and 33 percent, respectively.
Amena Sengal and her husband, Drew, did what 63 percent of North American home buyers in 2020 did, making offers on homes they had never visited. Covid has forced buyers to speed up. The flood of millennials demanding homes is facing a supply shortage of 3.8 million housing units according to Fannie Mae and Freddie Mac. Pl
Article from Mises Wire